Taxable sales dive, real estate listings jump in western North Dakota

Stanley – Third quarter taxable sales fell sharply in western North Dakota, while area real estate listings continue to climb.

Third Quarter Taxable Sales

Stanley – Taxable sales dropped 49.89% (year/year)

Tioga – Taxable sales dropped 51.15% (year/year)

Williston – Taxable sales dropped 43.73% (year/year)

Watford City- Taxable sales dropped 35.76% (year/year)

Dickinson – Taxable sales dropped 33.58% (year/year)

Minot – Taxable sales dropped 20.52% (year/year)

Bismarck – Taxable sales dropped 5.87% (year/year)

Fargo- Taxable sales dropped 3.90% (year/year)

The large drop in oil prices coupled with a drop in agricultural prices put significant pressure on oil patch communities, whose economies are heavily tied to the two industries. Even with the large drop in the last year, the sales tax numbers remain elevated over similar size communities outside of the oil patch.

Williston still boasts the second highest taxable sales number in the state ($455,629,512). Williston trailed only Fargo ($650,376,391) in taxable sales, the oil patch hub still boasts sales numbers higher than larger cities Bismarck ($444,710,203) and Grand Forks ($299,944,434).

Residential Real Estate Listings (Including residential lots)

Bismarck: 800

Minot: 640

Dickinson: 499

Williston: 378

Fargo: 304

West Fargo: 210

Watford City: 163

Moorhead (MN): 123

Jamestown: 97

Stanley: 43

Tioga: 24

Grafton: 6

Currently there are more residential real estate listings in Minot than in Fargo, West Fargo and Moorhead (MN) combined. When communities have large housing stocks and growth stagnates, prices will fall. In the case of Minot and Dickinson, prices could fall significantly in the next year. Dickinson currently has 499 residential listings, a staggering number for a community with an estimated population of 20,000.

Stanley currently has 43 residential listings, many of those listings are concentrated in a single development in the northern part of town. Eight of the listings are residential lots that are .25 acres in size with a price tag of $70,000, these lots are some of the most expensive in the state for that size. Thirteen of the other listings are twin homes in the same development, the twin homes also carry a premium price tag to comparable units in most parts of the state.

Bismarck has the most residential listings in the state. While a drop in prices is possible, Bismarck’s size and economic diversity should shield the capital city from any major price declines.

Commercial Real Estate

The reality is that things in most western North Dakota communities have slowed down. The prices on many commercial real estate listings don’t accurately represent this reality.

There are a few listings in Stanley that illustrate the current delusion of some of the sellers in western North Dakota. One listing is for 4043sqft steel building, listed at a whopping $1.6 million. There is also a land listing in which the seller is asking a mind boggling $1.9 million price tag for a 3.17 acre parcel. There is a separate land listing in which the seller is seeking $620,000 for a 1 acre parcel.

Commercial real estate prices should reflect the future earning potential of that particular piece of property. When the asking price doesn’t reflect the future earning potential of the property, the listing won’t sell. Simply, if someone can’t make money off of a piece of property they won’t purchase it.

Summary

The economy in western North Dakota is down, but the situation is far from dire. With that said, the housing stocks are piling up and prices are going to drop.

Barring some unforeseen increase in activity, sellers in these saturated markets will be forced to drop their prices to try and attract what is left of the demand. Minot and Dickinson appear to be the best candidates for significant price reductions.

Smaller communities like Stanley will likely see a drop in prices as well. The demand for both commercial and residential real estate, especially at current prices is virtually nonexistent in these smaller markets.

Bottom line, the sky isn’t going to fall in western North Dakota, but real estate prices surely will.

Commercial lot for sale in Stanley, North Dakota

Commercial lot for sale in Stanley, North Dakota

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